A recruitment business sells people, and its insurance problem follows from that. The workers it places are usually its employees for insurance purposes while working under somebody else's control, in premises it has never seen.
Temporary workers and the employers' liability question
Agency temps are normally on the agency's payroll even though they work under a client's supervision, which makes them employees for employers' liability purposes. The insurer rates them on what they actually do at the client site, so an agency placing warehouse and industrial staff is a different proposition from one placing office administrators. Agencies that place across several sectors need the wage roll split by sector rather than declared as a single figure.
Client site safety, which you do not control
The agency is an employer of people working somewhere it does not manage, so insurers ask what it does about it: client site assessments, checking the client's own risk assessments and induction, confirming who supervises, and recording the training and certification of the workers placed. This is the area where agency and client duties overlap, and the documentation an agency keeps is what separates a defensible claim from a paid one.
The bad placement, and professional indemnity
Where a placed worker turns out to be unqualified, unvetted or not entitled to work, and the client suffers a loss, the claim is against the agency's service rather than arising from an injury. That is professional indemnity territory, and it is the cover that answers for failed right to work checks, missing qualifications and references not taken. Client contracts in regulated sectors frequently name a minimum limit for exactly this.
Data, vetting records and the cyber line
An agency holds identity documents, right to work evidence, references, sometimes criminal record checks and always contact details, for far more people than it employs. That is a large and sensitive data holding relative to the size of the business, which is why cyber and data cover matters here more than in most service businesses, and why insurers ask how long records are kept and how they are secured.
Questions people ask about employment agency insurance
Do temps count for employers' liability?
Usually yes. Agency workers on the agency's payroll are employees for insurance purposes even while working under a client's direction, and they are rated on the work they do.
What covers a placement that goes wrong?
Professional indemnity, where the loss is the client's rather than an injury: failed vetting, missing qualifications or references not taken.
Does the client's insurance cover our workers?
Not as employees. The client insures its own premises and staff; the agency's own employers' liability answers for the people it places.